What Do You Know About Stock Options?
Calls. Puts. Strike price. Premium. Option writing.
These are just some of the terminologies I encountered in my Investment subjects in College a few years back. That was when I first heard and learned those various stock options trading concepts, the ideas and jargons of which appear alien and out of this world again to me. It’s been eight years since I graduated and since I veered away from the financial management career and chose a different field in Commerce, it’s just impossible that I remember and know by heart all those terms.
But hearing my US-based cousin’s experience on how he’s been hitting big bucks because of stock option trading makes me want to go over my College books and review the basics. It’s just amazing how he has mastered the industry in such a short time considering he has no education background on stock investments. It wasn’t easy at first, he admitted. In fact, he emphasized that trading stock options is not for beginners due to the fact that it has a higher leverage and a different type of approach as compared to the basic stock trading. An illustration he gave to me was trading options is more like betting on horses at the racetrack, whereby each person bets against all the other people there. The option buyer’s winning or gain is the option seller’s loss and vice versa. This is entirely different from a basic trading wherein one’s gain or winning doesn’t directly affect anyone’s trading. Everyone may gain independently at the same time and may also incur loss all together at the same time.
That’s what I understood from the short lecture he gave me via YM. He further instructed that if I’m really interested and focused on learning, I can go on and review, have a refresher course in Stock Investment, try it out then if I finally get the rhythm, take the next step of e-learning through options trading mentoring online. There are interesting and informative resources on the web that teach proven effective stock option strategies just like successful professionals do.
Hmm…let’s see.
Related posts:
